Billionaire Issa brothers shrink empire ahead of blockbuster IPO
The forecourts empire founded by the billionaire Issa brothers has sealed a second deal this week to sell off part of its international business as it works up to a possible blockbuster float in New York.
Blackburn-headquartered EG Group has agreed to dispose of its operations in Australia to Ampol in a deal which values it at A$1.1bn (£810.3m).
The deal comprises A$850m of cash proceeds and A$250m of Ampol stock and forms part of the group’s strategy to reduce its debt.
The news comes after EG Group sold its Italian division in a deal which values it at €425m (£367m) earlier this week.
The group, which was founded by Mohsin and Zuber Issa and is now co-owned by private equity giant TDR Capital, agreed terms with a consortium of established Italian operators comprising PAD Multienergy S.p.A., Vega Carburanti S.p.A., Toil S.p.A., Dilella Invest S.p.A. and GIAP s.r.l.
EG Group has long been reported to be preparing to float in New York in a move which would value it at around $13bn.
Russ Colaco, CEO of EG Group, said: “This transaction is a significant milestone in our ongoing efforts to streamline EG Group’s global portfolio and sharpen our focus on the markets where we see the largest growth opportunities.
“I would like to sincerely thank the Australian leadership team and all our colleagues for their significant contributions to the business.
“We remain fully focused on executing our strategy and building a platform for further growth, with our world-class grocery and merchandise, foodservice and fuel retail proposition.”
The Australian transaction is subject to antitrust and other standard regulatory approvals, with completion expected by mid 2026.
BofA Securities acted as exclusive financial advisor and Gilbert + Tobin as legal advisor to EG Group on the transaction.
Issa brothers’ empire battles falling profits
In June, Morning Wire reported that EG Group’s pre-tax profit was slashed from $1.4bn to just $10m in 2024.
EG Group said the change to its pre-tax profit was “largely driven by the material exceptional gain that the group reported following the divestment of the majority of the UK business in October 2023 and the profit from the USA sale and leaseback transaction which completed in May 2023”.
Before those exceptional items, the group made a pre-tax loss of $195m but it generated a profit of $205m from divestments.
In 2023, the group made a pre-tax loss of $125m before exceptional items which generated a profit of $1.5bn.
The deal in the autumn of 2023 saw the group sell its remaining UK forecourt business and certain foodservice locations to co-founder Zuber Issa for £228m.
Following the deal, Zuber Issa stepped down from his role as co-chief executive and became a non-executive director.
At the same time, Zuber Issa sold his shares in Asda to TDR Capital, making the private equity giant its majority shareholder. Moshin remains a significant shareholder in Asda.
The results also showed that EG Group’s revenue declined from $28.3bn to $24.1m over the year.
The group said its sales had declined as a result of the fall in fuel prices and the impact of its divestments over the past two years.